The Government of Canada announced last year that retired families earning more that $56,000 would have their Canada Pension Plan and Old Age Supplement income "clawed" back. Under the scheme wealthy Canadians would not benefit from the pensions they paid for. Who are those fat cats? It's probably you!

A recent analysis of the average Canadian family showed that they earned $77,381 and paid roughly $32,345 in income taxes. That means that many families earned more than $56,000 or perilously close to the cut off point. The question many Canadians will now have to ask themselves is do they work like maniacs for the balance of their productive lives to scramble enough together to live on or do they just kick back knowing that if they do nothing they will fall under the boundary and get their government pension. The second choice is made less viable by the fact that Canada Pension Plan contributions (call it tax) will increase to 9.9% of income (note that is not 10%) reducing the level of earnings available for savings. So far only 10% of Canadians have decide to take the first option. Another 2,000 Canadians annually have chosen to take their savings on a Caribbean vacation.